Carlyle Said to Hire Seven Banks for RAC Dividend Loan

Oct. 4 (Bloomberg) -- Carlyle Group LP hired banks to
arrange a 260 million-pound ($419 million) loan for its RAC Ltd.
unit to pay a dividend to its private-equity owner, according to
a person with knowledge of the situation.

BNP Paribas SA and Deutsche Bank AG are coordinating the
transaction, with Bank of America Corp., Credit Suisse Group AG,
HSBC Holdings Plc, JPMorgan Chase & Co. and UBS AG also
arranging the deal, said the person who asked not to be
identified because the deal is private.

The roadside-recovery company is offering to pay an
interest at 550 basis points more than the London interbank
offered rate for the new 260 million-pound, seven-year term loan
C, the person said. A basis point is 0.01 percentage point.

About 25 percent of the company’s original 620 million-pound loan facility has been repaid or canceled since
Washington-based Carlyle agreed to buy RAC in June last year,
giving it a leverage ratio of about 2.8 times earnings before
interest, tax, depreciation and amortization in September. The
ratio will rise to about 5 times because of the new loan, the
person said.

Consent Fee

Lenders will receive a 50 basis-point consent fee if they
agree to the financing by Oct. 19. Carlyle needs approval of
investors holding at least two-thirds of the debt and has
already received backing from more than 50 percent of lenders,
said the person.

It is also proposing to increase the margin on its existing
term loan B by 25 basis points and by 75 basis points on the
revolving credit and capital expenditure facilities, the person
said. Terms of the existing loans will be revised to keep the
same cushion over its covenants.

Term loan Bs and Cs are sold mainly to non-bank investors
such as collateralized loan obligations, bank loan mutual funds
and hedge funds. Under a revolver, money can be borrowed again
once it’s repaid.

Catherine Armstrong, a Carlyle spokeswoman in London,
confirmed the banks that are arranging the transaction. She
declined to comment on the details of the financing.

Carlyle agreed to buy RAC in June last year, using
leveraged financing arranged by BNP Paribas, Credit Suisse,
JPMorgan Chase., Morgan Stanley and UBS, according to data
compiled by Bloomberg.